Policy incentives helping India data centre business, says NTT

Policy interventions such as the Digital Personal Data Protection (DPDP) Act, the local data storage mandate by the Reserve Bank of India and incentives such as the data centre policies of different states have boosted the long-term domestic growth prospect of companies such as NTT Global Data Centres, the firm’s India head told ET.“These policies triggered the local CIO (chief information officer) to understand the importance of housing data within India, the cost benefits it would bring about and how beneficial it was to do that. I can’t quantify how much revenue they created, but it is a change that has brought about in the society itself,” Shekhar Sharma said.

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Over the last decade, the company has seen average growth of 6% year-on-year in its data centre business in India and is likely to see this momentum continuing. The company will also expand the capacity of 14 of the 18 already functional data centres in India to bring the total load capacity to 541 MW over the next five years from 268 MW now, he said.

The company will, however, continue to place these data centres in big cities and metros owing to the availability of stable power and better demand from customers in these areas, he said.

While real estate and other resources including power are expensive in big cities, the data centres can ask for higher prices from customers in such markets, Sharma said.

“When you move into a higher cost market, the people that are buying our infrastructure understand that much of what we do is based on real estate principles. They expect to pay a higher yield based on the cost of the market,” Doug Adams, president of NTT Global Data Centres, told ET.

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Most of the demand and subsequent growth has been coming from sectors such as banking and finance, and more recently also from governments at both central and state levels, Sharma said.The use of predictive and generative artificial intelligence has further augmented the growth of data centres in India as it helps companies plan maintenance better, Adams said.

“Today, we have alarm systems which give us so much data that it can be difficult for humans to comprehend. Even today, for the most part, we do time-based maintenance (of data centres) where after every certain number of months we change the server racks and other infrastructure. What we are starting to do now is based on algorithms and sensors that we have in the equipment,” Adams said.

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